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TAX ON TELECOM SECTORS IN BANGLADESH: A PUBLIC SUFFERING

Telecom sectors in Bangladesh have been targeted to be the source of extra revenue for the government. The Government increased the Supplementary Duty on the usage of SIM and RIM from 10% to 15% with the placing of its Budget on June 11, 2020. Mobile Telecom Operators in Bangladesh has persuaded to revise this hike. People with Low Income depended on the use of Mobile are extremely frustrated about the extra costs.

Tax on Telecom Services in Bangladesh is Causing a Public Suffering

People all over the world have been depending more on the use of mobile since the outbreak of coronavirus disease in December 2019. The freelancers of Bangladesh, with the goodwill of being second largest in the worldwide marketplace, have to use mobile extensively to earn their livelihood which is part of building a better post-pandemic world.

They have been bolted from the blue by the government’s decision of increasing supplementary duty from its previous 10 % to present 15% when Finance Minister AHM Mustafa Kamal put in the budget of the Fiscal Year 2020-21 in the parliament on Thursday, June 11, 2020.

Tax rise in Telecom sectors in Bangladesh made a big impact on the general mass as users are going to be the worst sufferers. The Association of Mobile Telecom Operators of Bangladesh (AMTOB) has requested the government both not to increase the tax and to reconsider it immediately before and after the finance bill was ready.

At present, corporate tax on telecommunication services is 45% in Bangladesh, 22% in India, and 30% in Pakistan. Despite being a very important and promising one in Bangladesh, telecom is now burdened with the highest percentage of tax among all the taxable sectors and the injustice is going to bring about miserable public suffering.

AMTOB officials spoke about tax on telecom services the last year when a similar hike was imposed like that of this year.

AMTOB officials spoke about tax on telecom services the last year when a similar hike was imposed like that of this year.

The tax has regularly been increased on telecom sectors in Bangladesh for the last 6 years. The SD was increased from 5% to 10% in the budget of last year. Users are now to pay a total of 33.25% VAT was only 15% in 2014. There was no surcharge before but now it is 1 percent.

If a customer recharges taka 100, he will have taka 75.05 utility. In other words, if he needs to use taka 100, he will have to recharge taka 133.25 nowadays. The price of the best internet pack offered by Banglalink was “149 Taka 14 GB 7 Days” before the budget was passed but now it is 169 Taka. Taka 53 to Taka 57 out of each Taka 100 of public flees to the government for different types of taxes.

The Telecom sectors in Bangladesh has never been in loss. With this in mind, the government intended to collect excess tax from the sector. They’re expecting to earn Tk. 1000 crore out of their ambition of generating around Tk. 1500 crore through the new SD raise from the 16.53 crore active mobile connections, of which 9.52 crore are internet users. But the desired revenue target might not be achieved because people will limit their use to cope with the situation.

The telecom operators in Bangladesh are now concerned about their existence in the rising situation. In the meantime, foreign investors have lost their interest to invest in the sector. People will make fewer phone calls and send fewer messages throughout this difficult time. They will not only use cheaper apps for talking or messaging but also try to use fewer internet data.

Although mobile use has been increased up to 30% because of the corona situation so far, tax on telecom services in Bangladesh will hamper the digitalization process. The farmers will hesitate to call when they’ll require agricultural advice from the authority. Students will experience that the way of learning has been shrunken.

The expenses of the freelancers, people engaged in online and small business will increase. Along with the public suffering, different types of activities will get costly and will be interrupted for the imbalanced tax on telecom services and then, the economy of Bangladesh will ultimately have to bear it.

Banglalink Chief Corporate and Regulatory Affairs Officer Taimur Rahman, Robi Head of Regulatory and Corporate Affairs Shahed Alam, Grameenphone Head of Public and Regulatory Affairs Hossain Sadat, AMTOB General Secretary SM Farhad, and National Revenue Board Ex-Chairman Abdul Majid have played a vital role from their respective positions to solve the problem. Shomoy TV, The Daily Star, and Dhaka Tribune have telecasted and published news in this regard. Telecom Minister Mustafa Jabbar himself assured that the Prime Minister’s ICT Affairs Adviser Sajeeb Wajed was informed of the issue.

People still hope that the government will decrease the tax on telecom services in Bangladesh that is a dire need to eliminate public suffering.

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Sources:

  1. BBC Bangla
  2. New Age
  3. The Daily Star
  4. The Financial Express
  5. The Daily Star
  6. Dhaka Tribune

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This feature is written by Md. Khaled Amin. He studied English at Chittagong University and writes content from home. 

You can reach him at [email protected].

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